Category: About money

10th grade, I saved up THB 3,000 for my first Nike basketball shoes. At 30, I start to see people save up 20% for their home down payment.

Once we start to make a paycheck or receive our credit card, that stopped. Everything seemed so easy now. The wait is gone. So was happiness. It was both less and short.

Fun money gave some of that that back: having a thing or service to want and the progression to reach that. The result feels happy, the progression feels happy, and the anticipation feels happy.

Side note: that basketball shoes was made for indoors, so it didn’t last long. I never bought another sneaker or sports shoes surpass 3k.

I decided to change the way to allocate fun money, from once a year to once a month.

• Original: split the difference after hitting the annual savings goal.
• New: allocate 5% of each regular income cycle and 50% – 60% of irregular income cycle.

Problem of fun money with “leftover” from annual savings:

1. Unable to forecast how much will be received, no clear goal.
2. Long wait time, easily side tracked by impulsive spending

With allocating in each income cycle, the purpose is to act as a reminder to refocus whatever the purchase is. There’s a goal to save towards to and cycles to evaluate the expense.

It used to be

5% of income that all goes into a cash envelope. We pull money from it if there’s any large purchases for the parents or flush into red envelop during Lunar New Year.

The experiment

Luckily, our parents are in good financial shape and that gave us room to plan for the future.

The idea came from Linda. We’ll experiment with splitting it half-half. Half in cash for the sort term expense; half in ETFs for long term cash flow.

The success factor is whether 2.5% is enough to cover the sort term expense.

November is a month with multiple large one time bills; we’ve almost doubled the monthly expense from NT$82,558 of October to 165,212 of November. There are 3 expenses that contributed to the inflated number.

1. MacBook Air M3 13-inch (NT$35,600): the old Macbook Pro 2015 wasn’t able to keep up anymore, it was the right purchase since I had a chance to run it for an interview over Teams on Chrome. A task that the old Intel i5 just couldn’t keep up.
2. TOTO toilet and sink (NT$30,750): replacing a crack on the previous toilet, this is obviously for safety reasons. Sink was not a necessary expense, but it was nice to see them in a set.
3. Gym membership (NT$26,000): this is on Linda, some tasks and habits are easier when there’s a professional tracking it.

It accumulates 55% of the November expense; without those, the November expense is 76,138. The baseline expense is actually lower than October.

Some observations

• I’d pay more for convenience. I could have paid less price for the toilet with a lesser known brand, but TOTO was a 10 minute walk from home and I don’t have to figure out the drainpipes myself. It’s just easier since I was finding time to meet work, family, and interviews.
• The family number. Linda and I merged our income numbers on the same spreadsheet, it required a habit tweak, relocating accounts, and discussions for both of us. I wonder if it’s true that two will work faster than one.

Top nonrecurring expenses in September

1. JVC 43K 43-inch TV, purchased for NTD$7778 on credit in August, accounted for 12% of total expense.
2. iPad peripherals including a screen glass replacement, a secondhand Smart Keyboard, and a secondhand Apple Pencil; total 6500. Accounted for 10% of the expense.
3. Linda’s emergency clothing from coffee spill, purchased for NTD$3,480 on cash this month, accounted for 5% of total expense.
4. Apple Watch SE2 for father’s day gift, split the cost with my sister, spend 3,200 and accounts for 5% of total expense.

Lessons Learned

– I was wrong about TV, I thought it would throw away the few family time, but it gave us more things to talk about. Plus, it gave me a bit more time for myself.

– My second try on iPad went well so far. Don’t treat it as a computer, treat it as a messy notebook. It’s not a device for organization.

After reading the first chapter of Psychology of Money, I flash backed on the event of my life that shaped the way I see money today.

Questions and attempted answers I had with myself.

Why do I keep track of my expense and income?
I started to receive allowance since the second grade, but my mom has a rule to play by. Before I knew how multiplication works, mom would ask me to list down all the date and the amount that I receive allowance, then add it up, have it checked by her (making sure addition weren’t wrong) before I receive the money. It looks something like this.

May 1, Bht$1
May 2, Bht$1
May 3, Bht$1
……
Total Bht$30

This tradition continued to 12th grade. By the time I entered college, I have been budgeting for a decade. This stuck with me ever since, from analog notebook to excel file to google sheet, from being single to a father.

Why does it take me forever time to make a purchase decision?
There’s a formula that my mom used to adjust my allowance. Bht$2 per day in second grade, Bht$3 per day in third grade, all the way until 11th grade when it flattened at Bht$20 per day. There’s an additional Bht$1000 for Lunar New Year and birthday. So even when I max out, it’d Bht$9300 a year and that’s all the money I have for going out with friends. A set of McDonald’s is 15% of the monthly budget, a taxi ride is 10%, so I need to save for months for a purchase.

Some purchase turned out to be a bad decision and I think that shaped followed me until this day. I remember saving $5000 in middle school to get a branded basketball shoes. I spent $3500 on a pair of NIKE, just to find out in the week after, that the shoes gain traction on the outdoor court I play in.

Why am I lazy, passive, and risk aversive when it comes to investing?
A good thing about budgeting for 2 decades is precise understanding and forecast for my expense. I rarely overspend my salary so there’s no urgency to make big money since I don’t ran out of them. Consequently, there’s really no urgency to get rich through risky investments.

Over the past 2 years, it’s becoming a family habit to use these old red envelopes to save up money for things we’re indecisive.

Through the process, I realize there are some benefits.

1. Time, at least a month, to think and discuss if this item will bring quality time for us. These discussions circling around improving our life is meaningful. Hey, if not, we can just scrap the idea.
2. Financial stress is significantly lower.
3. Proud feeling of paying cash. Saving for 3 months is very different from buying with credit card and paying off in 3 months.